Post navigation

A pogrom against bankers?

Let us all agree that top bankers behaved very badly. Let us agree too with Vince Cable that the fraternity operated like a cartel, rewarded far beyond ability or worth to society.

That said, the global crisis would have occurred even if bankers had been saints. The roots lie in the “China effect”, the world “savings glut”, and the whole way that globalisation has worked for 20 years.

The rising powers of Asia and the oil bloc accumulated $10 trillion of reserves, flooding bond markets with money. Japan put $1 trillion into play through the carry trade. Central banks in the West played their part by running negative real interest rates. They set the price of credit too low, especially in Club Med and Ireland.

All this combined into one colossal bubble. Bankers were the agents, not the cause. The witchhunt against them gathering force in this country has a nasty edge, and it has the character of a pogrom in much of Europe. We should be careful.

At a lunch in the City of London a couple of years ago, I was astounded to learn that many of those present felt that bankers were, indeed, the primary victims of the financial crisis – harried by a citizenry that had been happy to live off their taxes in the good times. This pushes the self-pity to an astounding level though.

A pogrom is a violent mob attack generally against Jews, and often condoned by the forces of law, characterized by killings and/or destruction of homes and properties, businesses, and religious centers.

Global Dashboard explores global risks and international affairs, bringing together authors who work on foreign policy in think tanks, government, academia, and the media. It was set up in 2007 and is edited from the UK by Alex Evans and David Steven. Read more here